Understanding Cryptocurrency Scam Recovery Fees

Lost money to a crypto or trading scam? Read this first:

If your losses exceed £3,000 (in the UK) or $10,000 worldwide The Crypto Adviser can offer advice on recovering your funds. 

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Crypto Scam Bank Claims

If you or your business have fallen victim to a scam involving crypto it’s likely that you’ll want to know if it’s possible to recover your stolen funds and how much this process costs.

The main two avenues of recovery involve either A) pursuing your bank for return or funds or B) using a team of forensic crypto investigators to trace the stolen coins.

Option A is the first port of call for most individuals who’ve used their bank account to transfer money to a legitimate crypto exchange before converting it to tokens and sending them on to a wallet controlled by scammers.

There are teams of dedicated solicitors who will often pursue a case against the bank on a ‘no win, no fee’ basis, meaning you only pay if the money you’ve lost is successfully returned to you.

For those who’ve lost their life savings or no longer have the funds to pay any fees, this is the best option. If it succeeds then you may get back your stolen funds. If it fails, then you haven’t lost anything.

However, not all situations will qualify for a case against a bank as a lot depends on the individual circumstances of the scam you were caught up in. Even if your case does go ahead, the final decision is likely to be adjudicated by the ombudsman who may then reject your claim at a later stage.

This process can take many months to complete and can be frustrating for the victim if it ends with an unsatisfactory outcome.

However, in many cases victims are successful and get all or a large chunk of their money back, even after the fees they’ve paid for legal assistance.

> Enquire about recovery through your bank

Fees For Crypto Tracing

The second option is to employ specialist investigators to ‘follow the money’, in this case crypto, across the blockchain until it reaches an exchange.

The aim of most scammers is to turn stolen crypto into cold hard cash. But this usually involves interacting with an exchange where various AML identity checks need to be completed as part of the account set up process.

Scammers sometimes use their own identities or that of people they know or pay in order to create accounts. This means it’s often possible to identify individuals and pursue law enforcement action against them.

Even if the culprits have hidden their identity and cannot be traced, it’s often possible to use legal avenues to persuade the end-point exchange to freeze the stolen funds and ultimately return them to the victim.

The process of tracing crypto and negotiating with exchanges, often in partnership with lawyers and the police, is a complex operation which is why companies who offer these services charge up-front fees.

They also use sophisticated software, both bespoke in-house applications and contracted from third parties, which all adds to the costs involved in running a successful crypto and fraud recovery operation.

For some people, tracing may be the only route left to them if the bank and later the ombudsman rejects their case. This is why it’s important to be prepared for the fees that come with employing a dedicated team of agents to track down your stolen crypto.

> Enquire about crypto tracing

Due Diligence Is Crucial                                  

Each week we hear from a wide variety of individual and corporate clients who’ve become embroiled in scams involving crypto.

A conversation we often have with individual clients is the issue of payment, with many questioning why they’re being asked for up-front payments from crypto recovery companies.

Some are even concerned that this may in itself be a scam, which is understandable given the number of companies who are operating fraudulently in the crypto recovery sector.

But we always try to explain that unless you’re using a no win, no fee solicitor, crypto recovery agencies will always charge in advance for their work – it’s just important to do your due diligence to ensure that the company you’re using is genuine.

Given the large sums of money that can be involved in scams, the fees will often represent a tiny percentage of what you’ve lost which in the long run could be worth spending if it means getting your money back.

We are happy to recommend trusted partners who specialise in both types of recovery. Please get in touch to find out more.